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The anatomy of growth: Why Microsoft + LinkedIn could be a win/win

Microsoft announced today that it will pay a 50% premium on LinkedIn’s shares to acquire the company.

The $26 billion acquisition will be the company’s largest. Getting value from the deal will not be easy, as Roger Martin reminded us recently, calling M&As a “mug’s game” and claiming that “70-90% of acquisitions are abysmal failures.” But looking inside the deal, you can see the growth potential. Here are three signs that this deal could end up growing both of these businesses—and their respective brands:

1. Hedging disruption risk. LinkedIn has built its business by delivering on a clear set of promises. Their purpose has always been clearly focused—it’s about careers—and over time they have enhanced the platform through richer media and more social features. Users know what to expect and are rarely disappointed. Microsoft recognized as much in the announcement when it affirmed that Jeff Weiner will remain LinkedIn’s CEO and that the company will “retain its distinct brand, culture, and independence.” Not disrupting the culture or public face is a strong hedge against a discount from in-market disruption or ambiguity within the company.

2. A shared and relevant purpose. It’s easy to explain this deal as adding Microsoft software to LinkedIn’s social platform. That makes sense, but it’s not what real people care about. Real people—users, employees, professionals—want work to be easier and more productive, and they want careers that are challenging and rewarding. To his credit, Microsoft CEO Satya Nadella sees a higher-order purpose in this merger, one that “weaves together” a context for working that accounts for both the tools we use and the social networks we operate in. This is a purpose that is deeply relevant to anyone employed today, and that sort of clarity is required for product and customer teams to see the value in this partnership.

3. A better value proposition. Cost synergies are usually pretty clear, but finding growth in M&As is difficult. Almost everything has to go right—cultures have to gel, value propositions have to get stronger, and products need to become more powerful and useful. Here is where this combination gets exciting. Embedding the rich functionality of Microsoft tools, like Office or Cortana, within an intuitive and personal LinkedIn UX has the potential to step-change the value of the LinkedIn platform, while introducing users to the power of Microsoft applications in new and unexpected contexts. There are hundreds of workplace tools available today. None are more robust than Microsoft’s, and no work-life platform is more popular than LinkedIn.

If the Microsoft/LinkedIn deal can deliver a connected work-life experience, it will not only grow the LinkedIn user base, but also drive cross-platform integration of Microsoft products, and increase time on the site. In short, Microsoft and LinkedIn merging is not simply an acquisition, but a stronger value proposition that forms a foundation for growth.


Chief Executive Officer, North America
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